Hi, I am looking to put about 1/3 to 1/2 of my emergency fund in a taxable account. It just saddens me that my emergency fund doesn't even keep up with inflation. My goal is 4-5% and don't expect to need it - ever hopefully; it's just there if I unexpectedly can't work for a prolonged period. I have the other 1/2 to 2/3 of the fund in a bank. My tax bracket is 28%; I live in a state without state income tax. I will probably use fidelity for continuity since my retirement fund is there.
What should I buy?
I was thinking the following but am not really sure. Most of my reading has been on retirement, tax-advantaged accounts.
25% FSTVX Fidelity Total Market Index Fund
25% FTIPX Fidelity Total International Index
50% bond funds - I'm really lost on the bonds here. Looking at 1) Fidelity US bond index fund - FBIDX. OR Fidelity Intermediate Treasury Bond Index FIBAX.
I realize that these bond funds are not tax-efficient. However, my thought is that I'm currently paying tax on my measly savings earnings... why not earn a higher interest rate since I'm paying taxes on it anyway? None of the municipal bond funds I saw generated much interest - which sort of negates taking it out of savings in the first place, right? Or am I looking at it wrong?
Thanks in advance!
What should I buy?
I was thinking the following but am not really sure. Most of my reading has been on retirement, tax-advantaged accounts.
25% FSTVX Fidelity Total Market Index Fund
25% FTIPX Fidelity Total International Index
50% bond funds - I'm really lost on the bonds here. Looking at 1) Fidelity US bond index fund - FBIDX. OR Fidelity Intermediate Treasury Bond Index FIBAX.
I realize that these bond funds are not tax-efficient. However, my thought is that I'm currently paying tax on my measly savings earnings... why not earn a higher interest rate since I'm paying taxes on it anyway? None of the municipal bond funds I saw generated much interest - which sort of negates taking it out of savings in the first place, right? Or am I looking at it wrong?
Thanks in advance!
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